The Next Big Thing Will Have Been Discussed 30 Years Ago

The “next big thing” will have first been talked about roughly 30 years ago, says technologist Greg Satell. IBM coined the term machine learning in 1959, for example.

The S curve describes the way new technologies are adopted. It is related to the product life cycle. Many times, reaping the full benefits of a major new technology can take 20 to 30 years. Alexander Fleming discovered penicillin in 1928, it didn’t arrive on the market until 1945, nearly 20 years later.

Electricity, did not have a measurable impact on the economy until the early 1920s, 40 years after Edison’s plant, it can be argued.

It wasn’t until the late 1990’s, or about 30 years after 1968, that computers had a measurable effect on the US economy, many would note.

source: Wikipedia

The point is that the next big thing will turn out to be an idea first broached decades ago, even if it has not been possible to commercialize that idea.

OTT as Effective Competition

With the widespread adoption of streaming video services, it was inevitable that change would come in the area of video services regulation. The U.S. Federal Communications Commission now will consider whether the AT&T DirecTV Now service is effective competition for standard cable TV linear video service, according to the Telecom Act of 1996. 

In the larger scheme of things, the decision is narrow, and means local franchise authorities in a few locales cannot regulate basic cable rates. That has been true generally, in most U.S. markets, for some time. As this chart by eMarketer shows, the linear streaming alternatives operate in a different segment of the market from the “on demand” streaming services. 

Up to this point, the on-demand services have generated more revenue, but live streaming (linear streaming) is gaining share as well, and is an alternative to standard cable TV or satellite TV packages. 

source: eMarketer

The proposed ruling by the FCC  matters for cable TV companies in general and Charter Communications in particular because local franchise authority rate regulation is not imposed when such competition exists. 

That likely ultimately also would be true of competition from other linear streaming services as well, which might offer scores of “live broadcast” video channels, although the specific finding in this instance is that DirecTV Now is relevant under clauses of the Telecommunications Act of 1996 that seek to promote video competition between telcos and cable TV companies. 

Services focused on “on demand” video, such as Netflix or Amazon Prime, presumably would not qualify, for purposes of determining applicable rate regulation, as they do not offer scores of live TV channels. 

Any determination by the FCC would not have wider implications, as effective competition has been deemed to exist in nearly all U.S. markets for decades. 

source: Grandview Research

Linear Streaming to be Deemed an Effective Substitute for Cable TV

With the widespread adoption of streaming video services, it was inevitable that change would come in the area of video services regulation. The U.S. Federal Communications Commission now will consider whether the AT&T DirecTV Now service is effective competition for standard cable TV linear video service, according to the Telecom Act of 1996. 

In the larger scheme of things, the decision is narrow, and means local franchise authorities in a few locales cannot regulate basic cable rates. That has been true generally, in most U.S. markets, for some time. As this chart by eMarketer shows, the linear streaming alternatives operate in a different segment of the market from the “on demand” streaming services. 

Up to this point, the on-demand services have generated more revenue, but live streaming (linear streaming) is gaining share as well, and is an alternative to standard cable TV or satellite TV packages. 

https://www.emarketer.com/content/us-subscription-video-landscape-2019

The proposed ruling by the FCC  matters for cable TV companies in general and Charter Communications in particular because local franchise authority rate regulation is not imposed when such competition exists. 

That likely ultimately also would be true of competition from other linear streaming services as well, which might offer scores of “live broadcast” video channels, although the specific finding in this instance is that DirecTV Now is relevant under clauses of the Telecommunications Act of 1996 that seek to promote video competition between telcos and cable TV companies. 

Services focused on “on demand” video, such as Netflix or Amazon Prime, presumably would not qualify, for purposes of determining applicable rate regulation, as they do not offer scores of live TV channels. 

Any determination by the FCC would not have wider implications, as effective competition has been deemed to exist in nearly all U.S. markets for decades. 

source: Grandview Research

How Important is Internet Access? More than Partner or Pet?

Okay, this is sort of light-hearted, but a survey suggests about half of U.K. residents think a reliable internet access connetion is more imporrtant than their significant other. About 70 percent believe reliable internet is more important than the family pet. 

Mobile Operators Get Into Single Sign-On with ZenKey

Single sign-on is a feature lots of consumers routinely use, in part because password management now is so difficult. U.S. mobile operators, though arguably late to the game, now plan to launch their own single sign-on service, called ZenKey. To be sure, the carriers tout the advantages of multi-factor authentication, including sources such as phone number, account type, user credentials, account tenure and subscriber identity module details. 

On the other hand, ZenKey will have to compete with Apple, Google, Facebook, Twitter and LinkedIn as providers of single sign-on features. On the other hand, ZenKey is among the most-logical ways to use data stores mobile operators possess. 

The Mobile Authentication Taskforce--AT&T, Sprint, T-Mobile and Verizon--will announce the ZenKey in October 2019. 

The foray into password management might hinge on whether it is as easy to use as the other single sign-on services, or perhaps easier, if that is possible. Whether consumers believe the story about multi-factor advantages is another obvious issue. Also, we might get a test of how much trust consumers have in their mobile service providers, compared to the other big brand names in the space. 

source: Techtarget

DirecTV Funds 93% of AT&T Interest Payments

Cash flow is the issue and the rationale for the original purchase of DirecTV by AT&T. That remains the case, despite subscriber losses across the linear video ecosystem and the satellite delivery segment. Some might prefer that AT&T divest DirecTV assets, but there are big cash flow implications. And that, in the end, is the crux of the matter. 

AT&T has huge free cash flow requirements, to support its dividend and reduce debt loads. It was never clear to me what else AT&T might have done--instead of acquiring DirecTV--to grow its cash flow fast. 

The big attraction for any sale of the DirecTV assets is lower debt, but at the cost of lost cash flow. DirecTV might throw off about $6.3 billion in annual free cash flow, assuming DirecTV U.S. revenues of $27.5 billion and profit margins of 23 percent, translating into an EBITDA (cash flow) of about $6.3 billion.

Keep in mind that AT&T’s total interest obligations annually are about $6.8 billion. In other words, DirecTV cash flow funds abut 93 percent of AT&T’s total interest payments.  

source: Forbes

How Attractive is 5G Fixed Wireless?

How attractive is 5G fixed wireless as a substitute product for existing fixed network internet access? Substantial, according to a new Parks Associates survey. 

According to Craig Leslie, Parks Associates senior research analyst, "once the technology is explained to them, almost half are interested in replacing their fixed-line internet service with 5G home services."

As always, consumers say they will take certain actions, and then do not; or say they will not do some things, and then do them. So it is difficult to make too-certain predictions about consumer behavior related to 5G fixed wireless, when consumers are not required to consider price, retail packaging and other elements of service. 

On the other hand, substituting 5G fixed wireless for fixed network service does not require, as does 5G mobile phone service, investing in new handsets with substantial costs. In all likelihood, the effective cost of switching fixed internet access service should be minimal, if, as expected, ISPs make customer premises gear available at low recurring charges, at subsidized prices and in ways familiar to consumers. 

Demand for mobile 5G service likewise seems relatively high, with the caveat that respondents likely were not told they would have to buy new smartphones to use 5G, and in various price ranges possibly up to $1000 or more. 

That noted, more than 33 percent of U.S. broadband households (perhaps 80 percent of all homes) cite some level of familiarity with 5G and over 40 percent of U.S. broadband households are interested in 5G, according to Parks Associates. 

Ultimately, 5G will be used by nearly all consumers, as 4G now is. 

source: Parks Associates

Only 13 percent of respondents reported they would pay higher fees for 5G service, which is not a surprising finding, nor necessarily indicative of actual future behavior, once the concrete value propositions are commercial realities. 

And that transition could come fairly rapidly. According to Parks, 20 percent of broadband households bought at least one new smartphone in the first quarter of 2019. At that rate, a substantial opportunity to introduce 5G devices exists, once the networks are more developed, the supply of handsets is diverse and value propositions clearer.